The challenge of foreign money for national elections

The source, quantum and deployment of election-related expenses of candidates and political parties is a topical issue and in many jurisdictions, it is regulated by law. Nigeria is no exception. The Constitution of the Federal Republic of Nigeria 1999 (as amended) and the Electoral Act 2022 have made provisions on the subject matter. One of the provisions deals with the regulation of foreign funding of political parties. This discourse reviews the legal provision and the challenges that might arise in its interpretation.

S.225 (3) of the Constitution provides that (3); no political party shall – (a) hold or possess any funds or other assets outside Nigeria; or (b) be entitled to retain any funds or assets remitted or sent to it from outside Nigeria. By subsection (4) of the same section, any funds or other assets remitted or sent to a political party from outside Nigeria shall be paid over or transferred to the Commission (Independent National Electoral Commission) within 21 days of its receipt with such information as the Commission may require. The Electoral Act provides directions and sanctions for political parties in respect of foreign funds in S.85. It states that any political party that holds or possesses any fund outside Nigeria in contravention of S.225 (3) (a) of the Constitution, commits an offence and shall on conviction forfeit the funds or assets purchased with such funds to the Commission and in addition, may be liable to a fine of at least N5million. Furthermore, a political party that retains any fund or other assets remitted to it from outside Nigeria in contravention of S.225 (3) (a) of the Constitution commits an offence and shall on conviction forfeit the funds or assets to the Commission and in addition, may be liable to a fine of at least N5 million.

A literal reading of this section limits the prohibition of dealing with funds and remittances from outside Nigeria or possessing or holding any funds or other assets outside Nigeria to political parties as distinct from candidates. Will this be interpreted to mean that this provision does not apply to candidates? Are candidates free to retain any funds or assets remitted or sent to them from outside Nigeria? The answers to these posers are not clear in the face of the provisions of both the Electoral Act and the Constitution.

It is imperative to inquire into the intention of the legislature or the jurisprudence behind barring foreign money or assets from political parties. First of all, there is a general legal intention to limit the influence of money in politics so that elections are not reduced to the will of the highest bidder or the richest political parties. Secondly, where donations to political parties are allowed, they are usually capped and a ceiling is imposed. By S.88 (8) of the Electoral Act, the maximum permissible in Nigeria for an individual to donate to a candidate is N50 million. Across so many nations, the prohibition of foreign money funding national elections is premised on the fact that democracy and elections should be about giving expression to the will of citizens and eligible voters. Allowing foreign natural and artificial persons to provide resources for national elections will imply that persons who are not eligible to vote or to be voted for are now in a position to influence the outcome of national and local elections. This could lead to a subversion of national sovereignty where elected officials will become beholden to foreign interests.
Against the background of this explanation, it appears the limitation related to foreign money should cover both the political party and the candidates. Considering the candidate-centric nature of elections in a presidential democracy, where rich candidates can spend huge sums of money outside the party electoral structure, the law should have been explicit on the prohibition covering political parties and candidates. But if the law did not explicitly provide for this prohibition of candidates, it is the duty of INEC to use its omnibus regulatory powers to extend the prohibition to candidates. Otherwise, it would be difficult to sustain a conviction of a candidate in court or forfeiture of money sent to him from abroad in the light of S.36 (12) of the Constitution. This subsection requires a criminal offence to be defined and the penalty clearly stated in a written law before you can charge and sustain a conviction against any individual. Written law refers to an Act of the National Assembly, the law of a state or subsidiary legislation made under the authority of a valid law.

Assuming that this prohibition of foreign money in Nigerian elections scales the hurdle of being liberally interpreted or under the authority of subsidiary legislation extended to candidates, how will the phrase; “be entitled to retain any funds or assets remitted or sent to it from outside Nigeria” be interpreted? If the jurisprudential thought is to bar foreigners from interfering in national elections, will Nigerians living in the diaspora be put in the same categorisation for example as Americans, Canadians, etc.? The answer will obviously be negative. If you were to classify them as foreigners, wiring money directly to a candidate’s or political party’s account will be in violation of the law. However, assuming a Nigerian living in Canada has a bank account in Lagos, Kano, or Enugu and wires money to his Nigerian account or his relative’s account – which is legal, and from that account or his relative’s account, money is dispensed to a political party or candidate, would this be categorised as foreign money? I doubt if anyone in good conscience can categorise that as foreign money.

The Constitution and the Electoral Act seem to have a lacuna that needs to be properly addressed in future amendments and reviews of the Electoral Act. Some of these issues were raised in the report of the Centre for Social Justice on reforms and amendments to the campaign finance provisions of the Constitution and Electoral Act submitted to the National Assembly as a contribution toward the review of the Electoral Act. Unfortunately, these issues were ignored and the challenge remains.

In conclusion, INEC needs to cover the field in its regulations to ensure that grey areas are addressed and that there is certainty in the campaign finance laws and regulations in the campaigns for the 2023 elections.